To perform subtraction identification of clones relevant to epithelial cell differentiation, a novel subtraction cloning procedure has been developed. Radioactive sense and cold anti- sense RNAs from the two cell types being subtracted are synthesized in vitro from libraries representing the transcripts of these two cell types, hybridized overnight in solution, and the unique single-stranded RNA sequences are easily separated from the common double-stranded RNA sequences by chromatography. Libraries of 200,000 members per microgram of polyadenylated RNA have been constructed. As a spin-off of this subtraction procedure it has been realized that genomic subtraction can also be accomplished using a slight modification of the basic protocols. This would enable the direct identification of "recessive" genes such as the ones involved in retinoblastoma, Wilm's tumor, and muscular dystrophy.